COUNTRY

RISK INDITIFIED AND ASSESSED

RATING

MITIGATION

Bahamas

Hurricane – The Bahamas is in a hurricane zone,
there is a high risk of occurrence but a low risk of impact.

Medium

See the Business Continuity Plan (BCP)

Power Cuts – The jurisdiction is subject to power cuts
on a regular basis, which result in business disruption, therefore the risk is high but the impact is low.

Medium

See the BCP

SECTROAL/ INDUSTRY

RISK INDITIFIED AND ASSESSED

RATING

MITIGATION

Reputational risk

There are unhappy customers, product failure, negative press and lawsuits that can adversely impact the Company’s brand reputation. Social media has amplified the speed and scope of reputation risk, which could cause a decrease in customer following and thereby reduce revenue. The target customers are substantially government employees, therefore the risk is low and the Impact is low.

Low

Easyterms Ltd. will monitor what others are saying about the company online and offline. Be ready to respond to those comments and help address any concerns immediately. Keep quality top of mind to avoid lawsuits and product failures that can also damage the company's reputation.

Competition Risk

While Easyterms Ltd. is aware that there is always competition in their industry, they are aware that it is easy to miss out on what other businesses are offering that may appeal to their customers. Increasing competition combined with a willingness not to change may result in loss of customers. The unique product offered prevents this from happening and therefore the likelihood and impact is low.

Low

Easyterms Ltd. will continually reassess their performance, refine their strategy, and maintain strong, interactive relationships with their audience and customers. Additionally, it's important to keep an eye on the competition by regularly researching how they use online and social media channels.

ENTITY-SPECIFIC

RISK INDITIFIED AND ASSESSED

RATING

MITIGATION

Strategic Risk

Strategic risks can occur at any time. For example, Easyterms Ltd. may see a decline in its sales because people’s preferences may have changed. The likelihood of this happening is low and the impact will be low. Easy Terms targets substantially government employed persons who makes payments via salary deduction.

Low

To deal with such risks, Easyterms Ltd. will implement a real-time feedback system to know what its customers want.

Economic Risk

The economy is constantly changing as the markets fluctuate. Some positive changes are good for the economy, which lead to booming purchase environments, while negative events can reduce sales. It's important to watch changes and trends to potentially identify and plan for an economic downturn. Easyterms Ltd. just experienced this due to the COVID-19 and while current customer’s payments continued, there is a potential for a decline in sales. Therefore the risk of economic down turn is likely and the impact could be substantial.

Medium

To counteract economic risk, Easyterms Ltd. will appropriates cash low risk investments, save as much money as possible to maintain a steady cash flow. Also, operate with a lean budget with low overhead through all economic cycles as part of the Company’s business and strategic plan.

Compliance Risk

Business owners are face with an abundance of laws and regulations to comply with. Being classified as a financial institution Easyterms Ltd. is required to ensure compliance with the FCSPA, in addition to FTRA, FTRR, FITRR, POCA etc. However, the likelihood of this happening is low and the impact would be low, as management has engaged a MLRO and CO to address any regulatory concerns.

Low

Non-compliance may result in significant fines and penalties. As a result, Easyterms Ltd. has employed a MLRO, CO and outside professional assistance to remain vigilant in tracking and implementing compliance requirements.

Security and Fraud Risk

As more customers use online and mobile channels to share personal data, there are also greater opportunities for hacking, identity theft and payment fraud. This type of risk is growing for businesses.

For Easyterms Ltd., not only will this risk impact trust and reputation, but it can also impact the company financially due to fraud.

The likelihood of this happening is low and the impact is low.

Low

To achieve effective enterprise risk management, Easyterms Ltd. will focus on security solutions, fraud detection tools and employee and customer education about how to detect any potential issues.

Financial Risk

This business risk involve credit extended to customers or Easyterms Ltd. own company's debt. Interest rate fluctuations can also be a threat.

Financial risk is about the financial health of the Company. Can the Company afford to offer installments to every customer? Can the Company operate if a certain number of customers fail to meet their payment on time?

This can likely happen due to customer’s loss of job and economic events. The impact could be substantial.

Financial Risk also include:

Medium

Making adjustments to the Company business plan will help to avoid harming cash flow or creating an unexpected loss.

Easyterms Ltd. keeps debt to a minimum.

Easyterms Ltd., is considering marketing its services to diversify its base so the loss of one would not devastate the bottom line.

Credit risk is the risk of financial loss arising if customers fails to meet their contractual obligations. The extent of the Company’s exposure to credit risk in respect of the financial assets approximate their carrying values recorded on the Company’s statement of financial position.

Low

The Company actively seeks to minimize this risk by placing its bank balances with first rate financial institutions.

Liquidity risk is the risk that the Company will not be able to meet its financial obligation as they fall due.

Low

The Company’s approach to managing liquidity ensures as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions. The Company maintains adequate highly liquid assets in the form of cash and cash equivalents to assure necessary liquidity.

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or value of its holdings of financial instruments.

The Company is exposed to market risk on investments in the Company. The company may not be able to readily dispose of its holdings when it chooses and also that price obtained on disposal is below that at which the investment is included in the Company’s financial statements.

Low

The Company’s market risk is managed on a daily basis by management through diversification of the investment portfolio across a wide range of financial assets. The Company’s overall market positions are monitored on an annual basis by the Directors.

Operational Risk

For Easyterms Ltd. this business risk can happen internally, externally or involve a combination of factors. Unexpected events could happen that causes the Company to lose business continuity.

It could be a natural disaster or fire that damages or destroys the Company physical business. Or, it might involve a server outage caused by technical problems, people, or power cut. Many operational risks are also people-related. An employee might make mistakes that cost time and money. Due to the policies and procedures in place, the likelihood of this happening and the impact would be low.

Low

Whether it's a people or process failure, these operational risks can adversely impact the business in terms of money, time and reputation.

Easyterms Ltd. addresses each of these potential operational risks through training and a business continuity plan. Both tactics provide a way to think about what could go wrong and establish a backup system or proactive measures to ensure operations aren't affected.